In this article, we use Deputy's Pay Rate Builder to step through creating a pay rule that will pay an additional amount of money when a team member works a night shift.
There could be several variations of this so we will go through three possible examples. You can use the examples below to tailor the pay rule to your requirements or see our FAQs.
Examples of shift differential scenarios:
1. Employees get paid $2 more per hour for all hours worked between 10pm and 6am.
3. If an employee begins work after 5pm, their hours are all paid $2 more per hour.
Example 1: Employees get paid $2 more per hour for all hours worked between 10pm and 6am.
1. Begin by creating a new pay rate or editing an existing one.
2. Click on Pay Rules and then Add to add a new pay rule.
3. Select Shift Loading from the drop-down menu. The Shift Loading pay rule calculation type will always apply to all hours, and allows you to configure parameters to modify this, like time of day.
4. Configure the following settings:
- Click to edit the pay rule name. Make sure you give the Pay rule a distinctive name (Eg. Night Shift Premium)
- Configure the payment. In this example, we want a loading of $2 per hour so we select Flat rate and enter $2 for every hour. By selecting the check box to configure the pay rule as a loading, we are paying this shift loading on top of the team members' ordinary pay.
- Enter the export code for your payroll software. In this example, we have used 'NSP'.
5. Now we want to ensure this triggers between 10pm and 6am. Modify the Days and Times section to configure this.
6. Don't forget to click Save when you are done.
Example 2: Employees get paid 20% more than their usual pay for all hours worked between 10pm and 6am. This does not apply during overtime.
1. Begin by creating a new pay rate or editing an existing one.
2. Click on Pay Rules and then Add to add a new pay rule.
3. Select Shift Loading from the drop-down menu. The Shift Loading pay rule calculation type will always apply to all hours, and allows you to configure parameters to modify this, like time of day.
4. Configure the following settings:
- Click to edit the pay rule name. Make sure you give the Pay rule a distinctive name (Eg. Night Shift Premium)
- Configure the payment. In this example, to pay an extra 20% more than usual pay we want to configure a Multiple of base rate of 1.2x their base rate. By not selecting the pay rule as a loading check box, we are going to pay this rule instead of any overtime or ordinary pay.
- Enter the export code for your payroll software. In this example, we have used 'NSP'.
5. Now we want to ensure this triggers between 10pm and 6am. Modify the Days and Times section to configure this.
6. Don't forget to click Save when you are done.
7. Go to the Rule Priorities tab and click Edit. This allows us to click and drag the pay rules to configure the priority of the pay rules. Since we want public holiday and overtime premiums paid ahead of the night shift premium we need to make sure they are higher in the rules order. Don't forget to click Save when you are done.
Example 3: If an employee begins work after 5pm, their hours are all paid $2 more per hour.
1. Begin by creating a new pay rate or editing an existing one.
2. Click on Pay Rules and then Add to add a new pay rule.
3. Select Shift Loading from the drop-down menu. The Shift Loading pay rule calculation type will always apply to all hours, and allows you to configure parameters to modify this, like time of day.
4. Configure the following settings:
- Click to edit the pay rule name. Make sure you give the Pay rule a distinctive name (Eg. Night Shift Premium)
- Configure the payment. In this example, we want to add a loading of $2 per hour so we select Flat rate and enter $2 for every hour. By selecting the check box to configure the pay rule as a loading, we are paying this shift loading on top of the team members' ordinary pay.
- Enter the export code for your payroll software. In this example, we have used 'NSP'.
5. Next, we want to ensure this triggers only for users who clock in after 5pm. Click on the advanced pay settings link on the bottom left of the page and scroll then down to Clock In and Out Time Requirements.
6. Ensure the clock in time is set to 5pm. This means for this rule to trigger, the team member must clock in between 5pm and midnight.
6. Don't forget to click Save when you are done.
FAQs
Can I use this configuration with other calculation types?
Yes. You may encounter scenarios where, for example, you may wish to pay more for night shift worked with overtime.
In that case, you could configure two overtime pay rule calculations such as Period overtime.
For the first pay rule calculation, you could configure it to trigger for regular overtime and for the second one, you could configure it to trigger during overtime AND a specific night time period and assign a higher pay rate amount to this overtime pay rule calculation to account for the night shift.
Make sure the overtime plus night shift pay rule calculation is higher in priority than the overtime-only pay rule calculation.
Can I do the same thing with particular days of the week?
Yes. Ensure the days of the week you wish this pay rule calculation to apply to, have been selected.
Can I do this with only a particular calendar day (for example New Year's Day?)
Yes. In the advanced section, use the Does this apply to a specific date filter to only apply this to that day.
I want this rule to only apply once (for example, if you work nights, you get a one-off $10 premium.) Can we do that?
Yes. Set up a pay rule similar to example 1, but use the Shift Allowance calculation type instead. This will pay the premium only once.